Saturday, May 30, 2009

What unique characteristics make services different form tangibles.

What unique characteristics make services different form tangibles. Explain. What are the implications of these characteristics in designing a suitable business strategy?

Service has a number of unique characteristics that make them so different from products. Some of the most commonly accepted characteristic are:
• Intangibility
• Inseparability
• Heterogeneity
• Perishable
• Ownership

In tangibility
When you buy a cake of soap, you can see , feel , touch ,smell and is to check its effectiveness in cleaning. But when you pay fees for a term in college, you are paying for the benefit of deriving knowledge and education which is delivered to you by teachers. In contrast to the soap where you can immediately check its benefits. Teaching is an intangible service. When you travel by aeroplane, the benefit, which you are deriving, is a service but it has some tangible aspects such as the particular plane in which you fly. In this case the service has both a tangible and intangible aspect as compared to teaching which has no tangible aspects at all. Figure 1 presents the tangible - intangible dominant aspect on a goods- service continuum. This continuum highlights the fact that most services are in reality a combination of product and service having both tangible and in tangible aspects. There are only a few truly pure tangible products or pure intangible services.


"Breaking Free from Product Marketing" Journal of Marketing

The distinguishing feature of a service is that its intangible aspect is dominant.
J. Bateson has described the intangible characteristic of services, which make them
distinct from products. These intangible features are:
• A service cannot be touched
• Precise standardization is not possible
• There is no ownership transfer
• A service cannot be patented
• Production and consumption are inseparable
• There are no inventories of the service
• Middlemen roles are different
The consumer is part of the production so the delivery system must go mto the marketer or the customer come to the delivery system.
Inseparability
In most cases services cannot be separated from the pefson or firm providing it. Service is provided by a person who possesses a particular skill, by using equipment to handle a tangible product (dry cleaning) or by allowing access to or use of physical infrastructure (hotel, train). A plumber has to be physically present to provide the service, the product, which can be produced in the factory today, stocked for the next two, three or more months and sold when an order is procured.
Heterogeneity
The human element is very much involved in providing and rendering services and this makes standaridisation Avery difficult task to achieve. The doctor who gave you his complete attention in your last visit may behave a little differently the next time. The new bank clerk who cashes your cheques may not be a efficient as the previous one and you have to spend more time for the same activity. This is despite the fact that rules and procedures, have been laid down to reduce the role of the human element and ensure maximum efficiency. Airlines, restaurants, banks, hotels have a large number of standardized procedures. You have to reserve a room in a hotel and this is a straightforward procedure for which all steps are clearly defined. Human contact is minimum in the computerized reservation systems, but when you go to the hotel there will be person at the reception to hand over the key of your room. The way this person interacts with you will be an important factor in your overall assessment of the service provided by the hotel. The rooms^Jthe food, the facilities may be all perfect, but it is the people interacting with you who make all the difference between a favorable and unfavorable perception of the hotel.
Perishablility
Services cannot be stored and are perishable. A car mechanic who has no cars to repair today, or spare berths on the train, unsold seats in a cinema hall represent service capacity, which is lost forever. Apart from the fact that a service not fully utilized represents a total loss, the other dimension of this pershibilty aspects is that most services may face fluctuating demand. There is a peak demand time for buses in morning and evening, certain train routes are always more heavily booked than others. This fluctuating demand pattern aggravates the pershibilty characteristic, of services.
Ownership
When you buy a product you become its owner- be it a pencil, book, shirt, refrigerator or a car. In the case of service, you may pay for its use but you never own it. By buying a ticket you can see the evening film show inn the local.cinema theater; by paying wages you can hire the services of a chauffer who will drive your car; by paying the required charges you can have a marketing research firm survey into the reasons for your products' poor sales performance, etc. In case of service, the payment is not for purchase, but only for the use or assess to or for hire of items or facilities.

A service is purchased or the benefits it provides. If we closely examine the reasons why
products are purchased, we find that they are brought not because of their physical/tangible features but because they provide certain intangible benefits and satisfaction.
Detergent powder provides the primary benefit of cleanliness, air -conditioner provides the benefit of a cool, comfortable environment, a mixer —cum-grinder provides convenience. The only difference between products and services is that in the latter the intangible component is greater than in the former. Thus, services can be treated as a special kind of product.
From a marketing view- point the same concepts and techniques are applicable for both products and services. The successful marketing of both requires market research, product design. Product planning and development, pricing, promotion and distribution. However, for marketing of services and the manner in which they impinge on the marketing strategy.

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